exv10w4











 




    Exhibit 10.4



 




    Executive
    Management Compensation Recapture Policy



 


	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
 
	
 

	
    Officers Subject to

    Recapture
	
 
	
 
	
    This Recapture Policy is applicable to any Senior Vice President
    or Executive Vice President, Chief Operating Officer, or Chief
    Executive Officer who is eligible for participation in the
    Senior Executive Management Compensation Program.

	
 
	
 
	
 
	
 
	
 
	
 

	
    Effective Date
	
 
	
 
	
    Notwithstanding any other provision of this Recapture Policy,
    this policy shall not apply to Triggering Events that occur, or
    to compensation paid, prior to the date you execute and agree to
    the terms of this Executive Management Compensation Recapture
    Policy.

	
 
	
 
	
 
	
 
	
 
	
 

	
    Triggering Event
	
 
	
 
	
    The recapture will be triggered if, at any time during the
    executive’s employment with Freddie Mac (or, under certain
    circumstances after termination of the executive’s
    employment, as described below), the Board provides the Notice
    Requirements set forth below and subsequently determines in good
    faith and notifies you in writing that any of the following
    (“Triggering Events”) occurred:

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              1.
	
 
	
    The executive has obtained a legally binding right to bonus or
    incentive payment based on materially inaccurate financial
    statements (which includes, but is not limited to, statements of
    earnings, revenues, or gains) or any other materially inaccurate
    performance metric criteria.

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              2.
	
 
	
    The executive’s employment with Freddie Mac is terminated
    for “cause” under subclauses (i) or (iii) as
    defined below or, within two years of the termination of the
    executive’s employment at Freddie Mac, the Board in good
    faith makes a determination that circumstances existed at the
    time of the executive’s termination that would have
    justified termination for cause under subclauses (i) or
    (iii) or the executive was later convicted of or pleaded
    nolo contendere to a felony committed before the termination
    date and such felony resulted in material business or
    reputational harm to Freddie Mac.

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              3.
	
 
	
    The executive’s employment with Freddie Mac is terminated
    for “cause” under subclause (ii) as defined
    below, or within two years of the termination of the
    executive’s employment at Freddie Mac, the Board makes a
    determination in good faith that circumstances existed at the
    time of the executive’s termination that would have
    justified a termination for cause under subclause (ii) as
    defined below and that actions of the executive resulted in
    material business or reputational harm to Freddie Mac.

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
    In determining whether Triggering Event 2 has occurred,
    the Board will not consider any act or failure to act by the
    executive to be “willful” unless it is done, or
    omitted to be done, by the executive in bad faith or without
    reasonable belief that the executive’s action or omission
    was in the best interests of Freddie Mac.

	
 
	
 
	
 
	
 
	
 
	
 

	
    Definition of Cause
	
 
	
 
	
    For purposes of this Recapture Policy, “cause” shall
    mean the occurrence of one or more of the following:

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              (i)
	
 
	
    The executive is convicted of or pleads nolo contendere to a
    charge of a felony;

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              (ii)
	
 
	
    In carrying out his duties, the executive engages in conduct that

	
 
	
 
	
 
	
 
	
 
	
 




















 






	 	 	 	 	 	 
	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
    constitutes gross neglect or gross misconduct that is materially
    harmful to Freddie Mac; or,

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              (iii)
	
 
	
    Any willful misconduct on the executive’s part that is
    materially harmful to Freddie Mac.

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
    In each case, “cause” shall not exist unless and until
    Freddie Mac shall have provided the Notice Requirements set
    forth below

	
 
	
 
	
 
	
 
	
 
	
 

	
    Notice

    Requirements
	
 
	
 
	
    The Board shall make a determination under this policy as to the
    occurrence of a Triggering Event, the existence of
    “cause”, or the amount of recapture only after first
    providing to the executive:

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              (i)
	
 
	
    reasonable notice setting forth Freddie Mac’s intention to
    make such a determination;

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              (ii)
	
 
	
    where remedial action is appropriate and feasible, a reasonable
    opportunity for the executive to take such action;

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              (iii)
	
 
	
    an opportunity for the executive, together with the
    executive’s counsel, to be heard before the Board; and a
    copy of a resolution duly adopted by a majority of the entire
    Board of Directors at a meeting of the Board of Directors called
    and held for such purpose finding that in the good faith opinion
    of the Board such determination is appropriate.

	
 
	
 
	
 
	
 
	
 
	
 

	
    Recapture Period
	
 
	
 
	
              1.
	
 
	
    In the case of the first Triggering Event, compensation subject
    to recapture may include Recapture Eligible Compensation (as
    defined below) paid to the Executive for up to two years prior
    to the Triggering Event.

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              2.
	
 
	
    In the case of the second Triggering Event, compensation subject
    to recapture may include Recapture Eligible Compensation paid to
    the Executive for up to two years prior to the date that the
    executive is terminated or subsequent to the termination of
    employment.

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              3.
	
 
	
    In the case of the third Triggering Event, compensation subject
    to recapture may include Recapture Eligible Compensation paid to
    the Executive at the time of termination of employment or
    subsequent to the date of termination.

	
 
	
 
	
 
	
 
	
 
	
 

	
    Compensation

    Subject to

    Recapture
	
 
	
 
	
    For purposes of this Recapture Policy, “Recapture Eligible
    Compensation” shall consist of the following:

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              1.
	
 
	
    In the case of the first Triggering Event, Recapture Eligible
    Compensation consists of Deferred Base Salary, Target Incentive
    Opportunity payments and any equity awards that vest after the
    Effective Date.

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              2.
	
 
	
    In the case of the second and third Triggering Events, Recapture
    Eligible Compensation consists of Deferred Base Salary, Target
    Incentive Opportunity payments, any equity awards that vest
    after the Effective Date and any severance benefits paid.

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
    In the event that the executive is terminated for cause under
    any of the subclauses (i), (ii) or (iii) specified in
    the Definition of Cause above, the executive forfeits rights to
    any future payment of Deferred Base Salary, Target Incentive
    Opportunity payments, equity awards that vest after the
    Effective Date or severance benefits that might otherwise have
    been due pursuant to the terms of applicable plans or awards
    from the date of executive’s

	
 
	
 
	
 
	
 
	
 
	
 











    

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    termination forward.

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
    The foregoing recaptures shall occur notwithstanding the terms
    of any applicable plan, agreement or award to the contrary.

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
    With respect to any recapture of compensation:

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
              •
	
 
	
    A recapture of Deferred Base Salary, Target Incentive
    Opportunity payments, equity awards that vest after the
    Effective Date, or other cash paid, for such compensation that
    the Board determines in good faith is subject to repayment,
    would require the executive to repay the gross amount of the
    compensation previously paid. Additionally, any further
    obligation of Freddie Mac to make payments under such plans
    could be cancelled.

	
 
	
 
	
 
	
               
	
 
	
    A recapture of equity awards that vest after the Effective Date,
    for such awards that the Board determines in good faith, would
    require the executive to forfeit the relevant shares.
    Additionally, any unvested and/or unexercised stock-based awards
    could be cancelled. As to any shares the executive has sold by
    the time of recapture, the recapture shall require the repayment
    of the net proceeds realized upon such sale.

	
 
	
 
	
 
	
               
	
 
	
    Semi-Monthly Base Salary, and any remaining portion of a
    Conservatorship Retention Award that was approved prior to the
    adoption of this Recapture Policy are not subject to recapture.

	
 
	
 
	
 
	
               
	
 
	
    The executive’s assets acquired prior to employment by
    Freddie Mac or acquired from sources other than Freddie Mac
    directly are not subject to recapture under this policy. The
    right to recapture is not retroactive prior to the date that the
    executive became subject to this policy.

	
 
	
 
	
 
	
 
	
 
	
 

	
    Amount to be

    Recaptured
	
 
	
 
	
    After providing the Notice Requirements, the Board has
    discretion to determine in good faith the appropriate amount
    required to be recaptured, if any, upon a Triggering Event,
    which is intended to be the compensation in excess of what
    Freddie Mac would have paid the executive had Freddie Mac taken
    into consideration the impact of the Triggering Event at the
    time such compensation was awarded.

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
    Any disputes between the executive and Freddie Mac concerning
    the occurrence of a Triggering Event or the amount subject to
    recapture shall be determined exclusively in accordance with the
    substantive laws of the Commonwealth of Virginia, excluding
    provisions of the Virginia law concerning choice-of-law that
    would result in the law of any state other than Virginia being
    applied.

	
     
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
    This Recapture Policy does not affect any of FHFA’s
    authorities.

	
 
	
 
	
 
	
 
	
 
	
 









 




    I agree to
    the terms of this Recapture Policy.
    



	 	 	 	 	 	 	 
	

     


	
 
	
 
	
 
	
 
	
 
	
 

	

    By:


	
 
	
 
	
 
	
    Date:
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 
	
 

	

     


	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	

    Officer Title


	
 
	
 
	
 
	
 











    

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